Deal near to save Kahuku Hospital

State and Kahuku Hospital officials hope to announce an agreement by the end of next week to keep the hospital open at least through the end of the 2007 state legislative session.

The hospital's board, state Health Director Chiyome Fukino, state lawmakers and officials of the Hawaii Health Systems Corporation, which runs the state's 12 community hospitals, met at the State Capitol yesterday.

"It looks like we got something," said Rep. Michael Magaoay, whose district includes Kahuku.

He said hospital officials will need to include details of their discussion yesterday in a memorandum of understanding.

"We're still drafting it and working on it," said Don Olden, Kahuku Hospital chief executive officer, "We're just trying to make sure that all the elements of the MOU is consistent."

Magaoay said the MOU will keep the hospital open at least until the end of the legislative session to give state lawmakers and Gov. Linda Lingle time to figure out if the state will take over the hospital's operation or continue subsidizing it. That's why HHSC officials were included in the discussion, he said.

Olden said the draft will include a promise to keep the hospital open at least through June 30, which is the end of the fiscal year.

The hospital has already received half of a $1 million state appropriation for the current fiscal year. If the hospital is to receive the other half, Fukino will have to agree to the terms of the MOU and recommend to Lingle to release the money.

Fukino said the money is ready to be released as long as the hospital can commit to fulfill the requirements in the contract.

She said the Legislature can pass an emergency appropriation to fund the hospital until it can be absorbed into the HHSC and the health department would work with lawmakers on the required legislation.

Sen. Clayton Hee said Democrats in the Senate met Tuesday and agreed to include support for keeping Kahuku Hospital open.

If keeping the hospital open through June 30 will cost more than $500,000, the state wants to know how much more and whether it is feasible to take it over, Magaoay said.

Last week, the Kahuku Hospital Board of Directors voted to keep the hospital open past the end of the year if they could get assurances from the Legislature and the Lingle administration that the HHSC would take over the hospital and/or other funding would be provided to allow the hospital to avoid a bankruptcy liquidation.

Kahuku Hospital is about $3 million in debt and has been operating at an average annual loss of about $1.2 million a year. The hospital had asked for $1.5 million from the Legislature this year but was only given $1 million.